Forget Credit Card Debt: Americans are Worried about Medical Bills

Medical bills are among the biggest financial worries for many Americans. Credit card debt doesn’t even factor in the top four.

As a personal finance writer, I read a lot about credit card debt, and I wait for the latest figures from the Federal Reserve about household debt. A focus on getting rid of high-interest credit card debt is almost a pre-requisite for any aspiring personal finance blogger — and for good reason. Credit card debt can severely erode wealth and negatively impact your finances.

However, I do get stuck in my bubble, and it’s easy to think that most people are stressed about their credit card debt levels. This isn’t the case, though. Medical bills are among the biggest financial worries for Americans.

A recent poll conducted by Harris on behalf of Lexington Law indicates that medical bills are the biggest cause of financial worry for Americans. After medical bills, student loan debt and identity theft follow. The top four financial concerns are rounded out by divorce-related costs. Credit cards don’t even factor in at this point.

Do Medical Bills Keep You Up at Night?

There’s a reason that so many Americans are haunted by their medical bills. For years, we’ve been hearing that medical bills cause bankruptcy. Even though health care costs may not be the only thing causing bankruptcies, they are often the final straw. Or they are the huge straw that makes everything else unmanageable. In fact, according to a recent NerdWallet study, even those with health insurance can end up with medical bills large enough that they can’t afford them — and that contribute to bankruptcy.

Even with health insurance, you could be one hospital visit away from complete financial devastation, since most of us have co-pays that require us to pay 20 percent or 30 percent of the bill. A major surgery or a severe illness could easily run into the tens of thousands of dollars, and result in a large bill for you.

When looking at the immensity of it, it’s easy to see why medical bills are such a big deal. Credit card bills, with their smaller amounts and even smaller minimum payments, don’t seem nearly so daunting. They also seem manageable in comparison.

How to Deal with Medical Bills

It can be difficult to deal with medical bills if you are facing the high costs of health care. Here are some of the things that can help you deal with the costs involved, in order to make things a little easier on your budget — and help your peace of mind:

Double-check your bill for errors. You might be surprised to find that a billing error is boosting your bill. You can ask for an itemized bill to see what things are costing you, and to make sure that you aren’t being wrongly charged.

Ask for a payment plan. Many health care providers offer a payment plan. In some cases, you can set one up with your hospital. You might end up avoiding interest if the hospital has a policy based on your income relative to the portion of the bill you are responsible for. Watch out, though: In some cases, rather than setting up a nice, interest-free installment plan, there are providers that extend lines of credit. This can mean interest and other complications related to your credit.

Negotiate. You can actually negotiate your medical bills. You can check to see what different services can cost, and look for the best rates, as well as compare it to what the government thinks your treatment is worth. Be aware, though, that your best bargaining position comes when you don’t have insurance and you can pay in cash.

Get other help. If you need to, ask for help. It can be hard to ask for help, but you might need it. From community programs, to your friends and family, consider how you can make things work with the help of others.

Any bill can be overwhelming, especially if you have other bills competing for your financial resources. When you are facing trouble, take a deep breath, a step back, and review your options so that you can make a plan. You’ll feel better, and be able to start taking control of your finances.

Just when I’m reading your blog, I received news that Secretary of Health and Human Services, Kathleen Sebelius, is leaving her job. In fact, many think that Obamacare policy has busted. It is noteworthy that health insurance premiums are rising sharply and is hurting most, especially young generation. Premium increase for the young has been huge. I don’t have the current figures but 2012 figures showed that average health care cost for American families crossed the $20,000 mark. That’s horrifying.

I see this firsthand working in the medical field myself. One stroke or heart attack, unfortunately very common things in America, can lead to a lifetime of expensive hospital visits, endless doctor appointments and medications. Just relying on insurance doesn’t cut it anymore. We regularly received bill after bill in the hundreds of dollars after our son was born (with a pretty “good” health plan). It’s a broken system.

Thanks for sharing your view. The other difficulty is that costs continue to rise with our system, no matter what is done. They rose before the ACA was passed, and they continue to rise now. Even if the pace of that rise slows, it is still likely to beat inflation, making it even more difficult to continue paying bills.